Don't even consider investing in DMRC now, it is a volatile investment

DIGIMARC CORP delivered massive losses today. It delivered -4.64% to close at 17.27. It's recent 5 day performance has been -1.63%, -1.45%, +3.26%, -4.18% and -2.02%.

[Themes containing DMRC]

DMRC showed a strong bearish trend over the last 3 months. During this period DMRC delivered -43.47% and saw a maximum drawdown of -45.95%. There was a short signal during this period which returned +43.47%.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

DMRC has been underperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 13 Jan, 2016 to 3 Dec, 2018. Over the last 2 years 11 months and 10 days, DMRC underperformed the SP500 index on 50% days. Which indicates that on days DMRC underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months DMRC was mostly loss making and delivered on average -0.85% per day. It's best return during this period (of +6.0%) was on Tuesday, 16 Oct, 2018. While it's worst loss in the same period (of -13.57%) was on Thursday, 1 Nov, 2018. The longest stort-term trends during this period were 5 profitable and losing days. The bullish trend (which returned +11.47%) started on 11 Oct, 2018 and went on till 17 Oct, 2018 while the bearish trend (which returned -17.68%) started on 2 Oct, 2018 and went on till 8 Oct, 2018.

The last 12 months saw DMRC's investors making profits in 4 months and incurring losses in 8 months. DMRC was less consistent in delivering monthly returs than SP500 index. DMRC significantly outperformed SP500 index in Apr 2018, when it returned +23.29% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. DMRC had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -36.67%. It is interesting to note that both DMRC and SP500 index significantly outperform during months when quarterly/annual results are announced.

Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.
-- Peter Lynch.

DMRC is currently seeing overall fall in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in DMRC's volatility from 1 Oct, 2018 to 1 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that DMRC has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

SP500 index has more chance of extreme outcomes than DMRC. Therefore, SP500 must receive a lower allocation than DMRC in your portfolio. SP500 index usually has shorter drawdown period than DMRC.

On a general note (since you are interested in DMRC), two instruments that have been extremely volatile in recent times are IX and GNK. Investors in these instruments should consider reducing their exposure (to IX and GNK) and diversifying their portfolios.